How Are They Different?
A nonprofit must follow certain rules based on the type of entity, its mission and purpose. If a nonprofit were a school for example, the bylaws would vary from those of a nonprofit religious facility. A school must list different uses of funds and committee types from that of a church, for example. Download our free template so you can follow as a typical bylaws construction is explored.
Elements to nonprofit bylaws should be divided into Article I, II, etc. and should include:
Name – The name and DBA of the nonprofit along with its address.
Purpose – Describe what the purpose of the nonprofit will be in detail.
Organization and Status – Here you will want to list how the nonprofit was formed via the articles of incorporation along with applying for an IRS tax exempt status. Some states also require nonprofits to gain tax exempt status, so check with your secretary of state or attorney general’s office on these rules.
Membership and Voting – This article will list who is eligible to be a member or officer and voting privileges.
Board of Directors – List the number of directors on the board that will be allowed along with assigned titles. This article also includes important elements such as duties, terms, elections, and any other information that may be relevant to your nonprofit board.
Meetings – Here, include how, where, and when monthly and/or annual meetings will occur as well as outlining the process for special meetings. Special meetings are necessary if issues arise and the board must make a quick decision. Your bylaws also need to state how many board members need to be present to constitute a quorum and if members can appear at meetings telephonically or via proxy.
Committees – Almost all nonprofits will have committees of some sort. These can include fundraising, selection, or grant committees and an advisory committee. List every committee you plan on creating along with assigned roles and how each member of the committee will be elected, hold meetings and when and how they will report to the board of directors.
Finance – In a nonprofit organization, this may be the most important part of your bylaws. Most nonprofits seek grants or other types of funding and these grant proposals will ask for annual audits. Here you must determine who and when will audit the books (usually an agreed-upon outside accounting firm) as well as how financial reports will be delivered to the board and who will be responsible for those reports. The financial section of your bylaws also needs to include items such as an agreed-upon nonprofit software or bookkeeper(s) to be used, bank accounts and check-signing authority. If your board plans on investing capital dollars to grow, the person (or board director role) responsible for these investments and reports should also be mentioned. Anything and everything that has to do with money or how money will be spent or collected is key to include in this part of the nonprofit bylaws.
Dissolution – All bylaws, whether they are nonprofit or not, must include what will happen if the nonprofit dissolves. Here you should list how nonprofit assets, accounts, and cash will be assigned and where. Remember, nonprofits only gain a 501(c)(3) status because they do not intend to make a profit. Most Corporation Commissions or Public Regulatory Commissions have requirements on the dissolution of nonprofits, so you may want to check with these organizations first on how to word the dissolution section of your bylaws.
Amendments – Here, state how and when the bylaws can be amended. For instance, will it take a vote and, if so, what will represent a quorum for updating or amending the bylaws.
Authority – Some bylaws include an authority section to show what form of order will be used in all board meeting such as Roberts Rules of Order. This meeting minute rule book sets exact rules on how meetings will be held including who speaks, how votes are obtained, first and seconded prior to approval by the board, among other important rules.
Signatures – This section is simply a place for every board member to sign and accept the bylaws.